Cattle and Beef Markets

The cash fed cattle market was exceptionally dead last week, with not even 2,000 head being confirmed sold by end of day Thursday. The prior week saw slow sales pushed off until Friday, with prices eventually coming out to $137- 140 live and $208-214.

Mexico has exported feeder cattle to the U.S. for more than a century and continues to do so today. After increasing in the mid-1980s, U.S. imports of Mexican cattle have averaged 1.08 million head for the last 30 years. In the most recent 10 years, the average has been slightly higher at 1.

Over the last decade, retail food price inflation in the United States has bounced around a bit, with yearly price increases ranging from 0.3 to 6.4 percent. In 2007 and 2008, grocery store prices rose 4.2 and 6.4 percent, respectively—well above the 20-year annual average increase of 2.

While the average retail price of beef has declined, the share of the consumer beef dollar going to producers has increased. In January, ranchers received 50 cents of every consumer dollar spent on beef. This is the highest that portion has been since August of 2015, when it was 52 cents on the dollar.

I have my own health insurance and pay the premiums with my own after-tax dollars. I thought I could deduct the premiums on line 29 of my 1040, but am now told that the premiums must be run through the LLC and counted as guaranteed payment income to me from the LLC.

The average age of principal operators in the latest Census of Agriculture (2012) was 58 and has been greater than 50 since the 1959 census. That farmers are older, on average, than other self-employed workers is understandable, given that the farm is the home for most farmers, and they can gradually phase out of farming over a decade or more.

“These facts combine to support that we are in a transition phase, going from placements below year-ago levels to placements above yearago levels. Of course if there is a large shift in market fundamentals such as a short corn crop; these expected dynamics will change.

Complete beef trade data for 2015 was released recently in the USDA Economic Research Service’s Livestock and Meat International Trade Data series. Not surprisingly, imports of beef and veal into the U.S.

lose a lot of farms and ranches; roughly 20,000 to be specific. However, these losses were all hobby farms and easily made up by increases in the number of larger farms. Possibly more pressing however, is the loss of 1 million acres in farm and ranch land.

The Purdue Comparative Decision Support matrix, known as PCDS, includes a spreadsheet tool that allows users to create an operating budget based on their own fixed and variable costs, cash flow and expected revenue. The PCDS2 profit/loss analysis function uses cost and price information to calculate potential earnings.

The cash fed cattle trade was slow to develop last week, though it is unclear if that was because packers were holding out on the hope of declining prices or because they just didn’t need cattle last week. By last Thursday afternoon, not even 6,500 head had been confirmed for the whole week.

In 2016, payments to stakeholders are forecast to increase by $3.3 billion (4.8 percent), while net value added is forecast to rise by 1.3 percent. Net value added represents the sum of economic returns to all the providers of factors of production.

Agricultural exports support job growth in the U.S., and the number of jobs depends on the type of products exported. In calendar year 2014, $150 billion in U.S. agricultural exports supported an estimated 1,132,000 full-time civilian jobs, up from the 1,095,000 agricultural export-related jobs the previous year.

Both net cash and net farm income are forecast to decline for the third consecutive year after reaching recent highs in 2013 for net farm income and 2012 for net cash income. Net cash farm income is expected to fall by 2.5 percent in 2016, while net farm income is forecast to decline by 3 percent.

With the final 2015 trade data in hand, it is possible to look back and summarize 2015 North American cattle trade. Limited cattle inventories, market conditions and exchange rates all played a part in 2015 cattle trade between the U.S. and Canada and suggest what might be expected in 2016.

In the situation you describe, assuming the decedent held 100 percent of the property, the heir or heirs can sell with modest capital gain tax if the sale price is close to the appraised value of the property at date of death.

Canada and Mexico are the two largest sources of U.S. agricultural imports and account for about one-third of the total value, while the combined value of imports from the countries that comprise the European Union roughly equal the value of imports from Canada.

Cash receipts across all commodities are expected to fall by nearly $9.6 billion in 2016. As in 2015, this decline largely reflects falling commodity prices rather than changes in production, which are lower for a broad set of agricultural commodities in 2016 relative to recent years.

The outlook for ag credit conditions deteriorated sharply in late 2015, based on a fourth-quarter survey by the Kansas City Federal Reserve. Bankers expected a surge of farm loan demand and loan renewals and the steepest drop in repayment rates in the last decade, the survey found.